The Bitcoin halving is one of the most significant events in the crypto world, in this article we will also explore Coinbase’s point of view.
This phenomenon, which occurs approximately every four years, has a direct impact on the amount of new cryptocurrency generated and on the reward that miners receive for adding new blocks to the Bitcoin blockchain.
The term “halving” comes from the fact that the reward for mining Bitcoin is cut in half, a mechanism that was coded into the Bitcoin software by Satoshi Nakamoto to mimic the progressive scarcity of mining resources in the real world.
Summary
What is Bitcoin’s Halving and what are the economic implications according to Coinbase?
The Bitcoin halving reduces the reward that miners receive for their work of verifying and recording transactions on the blockchain. Originally, this reward was 50 BTC per block. After the first halving in 2012, it was reduced to 25 BTC, then to 12.5 BTC in 2016, and recently to 6.25 BTC in 2020. The next halving is expected in 2024, and will further reduce this reward to 3.125 BTC per block.
According to Côme Prost-Boucle, Director of Coinbase France, “Bitcoin’s halving creates a sense of digital scarcity in the cryptocurrency market.” This programmed decrease in the supply of new Bitcoins often generates expectations of a price increase, as the reduction in supply, with constant or increasing demand, can lead to an appreciation in value.
Historical forecasts show that, in the past, halvings have often preceded significant bull runs. However, Prost-Boucle warns that “various factors also influence this change”, indicating that it is not only the halving that determines the price of Bitcoin, but also other elements such as regulation, technological innovation, and the general market sentiment.
Prost-Boucle also highlights the positive effect of halving on the industry in terms of education and innovation. During halving periods, there is often an increase in financial education and awareness of cryptocurrencies, both among regular investors and newcomers. This phenomenon is particularly relevant in France, where the adoption of cryptocurrencies has seen exponential growth.
“In France, we have witnessed the impact of the industry on the local market, as the adoption of cryptocurrencies has accelerated with one in eight people owning crypto assets, a substantial increase of 28% in one year,” says Prost-Boucle. These data reflect a growing interest and increasing confidence in the cryptocurrency sector at a local level.
Future Perspectives and Market Growth
Looking to the future, the director of Coinbase France sees a positive path for the region, supported by the impacts of the halving. The potential increase in education and innovation thanks to halving can support the positive trajectory of the region.
The combination of increased financial education, continuous innovation in the blockchain sector, and institutional adoption could further strengthen France’s position as a leader in the cryptocurrency sector in Europe. Coinbase’s vision is to leverage these developments to consolidate its presence and impact on the French market.
In conclusion, the phenomenon of Bitcoin halving is not just a technical event, but a powerful catalyst that brings significant changes at an economic level and in innovation in the cryptocurrency sector. The periodic reductions in mining rewards serve not only to mimic the gradual decrease of natural resources, but also to introduce a mechanism for controlling inflation within the Bitcoin network, preserving its value over time.
With each halving, we witness a growing attention from both regular investors and institutional ones, with a direct impact on the adoption of cryptocurrencies. In particular, in France, the increase in interest and adoption represents a clear signal of how cryptocurrencies are starting to be perceived not only as a speculative investment, but as a stable and growing component of the financial landscape.
The next halving scheduled for 2024 could therefore represent a turning point for the price of Bitcoin, but above all for the general perception of cryptocurrencies. As emphasized by Côme Prost-Boucle, the effect of halving goes far beyond mere financial speculation, encouraging education, innovation, and the growth of an entire industry. With an increasingly informed population and continuously improving technology, we can expect cryptocurrencies to become more and more integrated into national economies and global financial systems.
